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Consumer Protection Week: Record Losses of $10 Billion Due to Scams Were Reported to the FTC Last Year!

Q. You have always been so helpful in educating your readers about senior scams. Unfortunately, I recently read somewhere that there are some new scams on the horizon, including those involving hacking, identity theft, and cryptocurrency fraud. Can you explain more about these and other top scams, so I am aware and know what to look out for? Thanks for your help!

A. Rich Brune, a 75-year-old Navy veteran living in Virginia, recently fell for an online scam that cost him nearly $800,000. Sophisticated criminals posing as Microsoft workers contacted him online and told him that his computer had been hacked, his financial accounts were compromised, and that he needed to take urgent action. Over a five-month period, he was instructed to transfer much of his life savings into a cryptocurrency account that the scammers told him was safe from hackers. Instead, he was being robbed of his nest egg.

To add insult to injury, after his money vanished, the Internal Revenue Service informed Brune that he owed $200,000 in taxes because the money stolen from him had been withdrawn from his retirement accounts. According to Brune, “As soon as I pay off the IRS, I will be virtually penniless.” Hopefully something can be done to help Brune and others in similar situations. Increasing awareness about scams, such as this one, is among the goals during National Consumer Protection Week (happening this week, March 3-9) and Social Security’s “Slam the Scam Day,” which occurred yesterday, March 7.

Raising Awareness During National Consumer Protection Week

National Consumer Protection Week is a Federal Trade Commission (FTC) initiative that is focused on helping Americans safeguard their personal and financial information. Such protection is needed now more than ever due to an increasing number of scams. According to newly released data from the Federal Trade Commission (FTC), record losses of $10 billion due to scams were reported to the agency in 2023.

Although people of all ages are susceptible to these types of fraud, statistics show older adults tend to suffer the greatest financial losses. Scammers targeting seniors have become far more sophisticated in recent years due in part to rapid advances in artificial intelligence (AI) technology. Whether it’s by an online tech/cryptocurrency scam (as described in the case study above), impersonating government officials using AI, or claiming to offer financial assistance, scammers are unrelenting in their attempt to defraud seniors.

Watch Out for an Emergence of These Three Common Scams

Throughout the years, we’ve explained how to avoid scams in many of our articles, and you can access lots of helpful information on our blog by clicking here. According to the Better Business Bureau (BBB), the riskiest type of cons in the US vary a bit from what we’ve covered in the past. They are similar to what Rich Brune experienced in our example, with crypto fraudsters frequently cheating their victims out of thousands and often hundreds of thousands of dollars.

Unfortunately, scammers are continually becoming more creative and are therefore finding more and more ways to cheat investors out of their money, the BBB said in its annual report about the biggest scams of 2023, which is based on 67,000 reports of scams. About 80 percent of Americans targeted by crypto and investment scams last year lost thousands, the BBB reported. The median dollar amount lost was $3,800, but many people lose much more than that in crypto scams.

Here’s how these scams often work: hackers use social media, video game platforms, or text messages to contact people and brag about how well they are doing financially because of a crypto investment. It may start off as a seemingly innocent “wrong number” text or a friend request from someone you don’t know on Facebook or a friend request from someone you do know, whose account has been duplicated or hacked. After a targeted victim replies and engages in any way with the scammer, the conversation eventually turns into an ask, often after weeks or months, during which time the criminal scammer is gaining the trust of the unsuspecting victim. The scammer eventually suggests the victim purchase, trade, or store digital assets, such as cryptocurrency, on fraudulent exchanges.

Cryptocurrency is an unregulated investment space that federal regulators and consumer advocates believe makes it ripe for fraud. Its popularity exploded during the pandemic, and today, the cryptocurrency industry boasts a $2.65 trillion market cap, according to Forbes. Crypto investors have reported losing billions of dollars due to hacks or scams. In another example similar to Rich Brune, a 70-year-old California woman filed a lawsuit this year against Chase Bank after she lost $720,000 to a fraudster in a crypto scam. Here is a helpful resource from the Federal Trade Commission on how to avoid cryptocurrency scams and who to report them to if you or a loved one are a victim.

Second Riskiest Scams Are Employment Scams

The BBB named employment scams as the second riskiest scam in 2023. In these scams, a scammer contacts a victim and convinces the person that they’ve been hired at a company and needs to complete employee information. In reality, the scammer is stealing someone’s personal information. Scammers may also be trying to get new “employees” to send money in devious ways. As an example, many people would like to make money working from home. Scammers know this, so they place online ads claiming that they have jobs where you can make thousands of dollars a month working from home with little time and effort. The job could be anything from reshipping products to selling items to people you know.

In some cases, instead of making money, you end up paying for starter kits, so-called training, or certifications that are useless. You may also find that your credit card is charged without your permission, or you get caught up in a fake check scam, where you deposit a check from your new employer, the employer then asks you to send some money back due to “overpayment,” but the check will ultimately bounce, and the bank will want you to repay the full amount of the fake check, while the scammers keep the real money you sent them.

If someone offers you a job and claims that you can make a lot of money in a short period of time with little work, it’s likely a scam!

Online Purchase Scams Are the Third Riskiest Scams

Online purchase scams were the third riskiest scams in 2023, according to the BBB. Victims typically log onto a phony website to purchase an item, but the scammer never delivers the product. Phony websites also trick consumers into providing payment information. The scammers take your information and your money, but as mentioned, you never receive the products. Always be very suspicious of ads you see for goods that scammers frequently place on legitimate websites, such as Facebook and news websites. Just because the ad is on a legitimate website does not mean that the ad is legitimate. And never make a purchase from an internal web browser such as a web browser that pops up inside of Facebook or inside of another program. If you are considering making a purchase, use a web browser to find the vendor’s actual website and make sure it is secure. And also look for the item first on a legitimate website you trust such as Amazon.com, which may offer the same product for an even lower price.

Making payments on unsecure sites is a major way that malicious online criminals are stealing credit card information. Before paying for a purchase online, make sure the website you’re on has “https” at the beginning of its URL with a lock symbol. This means the site has a protected network connection. Websites with “http” at the beginning of the URL with no “s” are not secure and are thereby vulnerable to attacks by scammers who steal credit card information by monitoring network traffic. Also be aware of pop-up windows that appear while you are on a website asking for personal or financial information to receive coupons or to win free items.

Another type of scam is a package delivery confirmation scam. The scammer calls or emails claiming to be from the US Postal Service or a major shipping company and state that you have a package waiting for delivery. To ensure the package is meant for you, you are asked to provide personal information, which the scammers steal to use to open credit accounts in your name. In response to this scam, the US Postal Service explained it does not call people and ask for personal information if there is a problem with a delivery.

Tips for Avoiding Scams

When it comes to avoiding scams, prevention is truly the best medicine. These are some tips from the FTC to help you or your senior friends and loved ones to steer clear of scams:

  • Never give personal or financial information in response to an unexpected request. Honest organizations won’t call, email, or text you to ask for personal information such as Social Security, bank account, or credit card numbers.
  • Never click on links in unsolicited emails or emails from unfamiliar sources. The links may lead to an illegitimate website attempting to get you to enter your credit card or other personal information. Some links may download malware (malicious software, such as computer viruses) to your computer when you click on them that can steal your banking information, including log-in identification, passwords, and credit or debit card numbers. These emails typically look very similar to ones sent by well-known retailers, banks, and other entities, so be vigilant when clicking on them.
  • Never feel pressured to act quickly: Scammers take advantage of people by convincing them they need to pay or hand over information right away in order to get a special deal or discount, while honest businesses will always provide time to make a decision. Anyone who pressures you to pay or give them your personal information is likely a scammer.
  • Be on the lookout for emails that have typos or other obvious mistakes. In addition, be skeptical of email attachments described as coupons, rebates, or payment forms – they could include malware. And avoid email offers that seem “too good to be true.” If an email promises popular items for free or a surprisingly low price, it is probably a scam.
  • Stop and talk to someone you trust: Before you reveal information, make any kind of financial payment, or even click on a link, stop and tell someone – whether it’s a friend, a family member or a neighbor – about the situation. Talking about it may help you realize it’s a scam.
  • Be aware of scammers’ preferred payment methods: Never pay someone who insists that you can only do so with a payment app such as Venmo, Cash App, or PayPal Friends and Family, a wire transfer service like Western Union or MoneyGram, a gift card, or cryptocurrency. Never deposit a check you’ve received as payment from someone you don’t know and send money back to them via one of these methods; these checks are likely not real. Or they may be real at first, but then take a dangerous turn.
  • Never mix online dating and investment advice: If you meet someone on a dating site or app, and they want to show you how to invest in crypto, for instance, or ask you to send them money or make an investment, that’s almost always a scam.
  • Government agencies typically initiate communications by letter unless you call them first. Unexpected contact or demands through any other method are likely a scam. National “Slam the Scam” Day is designated by Social Security’s Office of the Inspector General to raise awareness of government imposter scams. Click here to learn more.

Where to Report Scams

A recent AARP study says many of the scams that account for the nearly $30 billion lost go unreported, and the FBI is now urging anyone who encounters suspicious activity online to disengage and report the conduct to law enforcement. USA.gov has a helpful, interactive website that provides detailed information on where to report a scam, based on the type of scam. Click here to learn more.

Plan in Advance for Yourself and Your Loved Ones

While keeping up with scams that are affecting senior consumers is important, it is also very important to keep up with your own planning.

If you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please contact the Farr Law Firm today:

Elder Care Fairfax: 703-691-1888
Elder Care Fredericksburg: 540-479-1435
Elder Care Rockville: 301-519-8041
Elder Care DC: 202-587-2797

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About Renee Eder

Renee Eder is the Director of Public Relations for the Farr Law Firm, and gives the voice to the Critters of Critter Corner. Renee’s poodle, Penny, is an official comfort dog who she and her children bring to visit with seniors who are in the early stages of dementia at a local senior home once a month.

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